ILLINOIS OFFICIAL REPORTS

Appellate Court

Freedberg v. Ohio National Insurance Co., 2012 IL App (1st) 110938

Appellate Court

Caption

HOWARD FREEDBERG, Plaintiff-Appellant, v. OHIO NATIONAL

INSURANCE COMPANY and DENNIS W. McCABE, d/b/a D.W.

McCabe and Associcates, Defendants-Appellees.

 District & No. First District, Fifth Division

Docket No. 1-11-0938

Rule 23 Order filed

Rule 23 Order

withdrawn

Opinion filed

June 22, 2012

July 24, 2012

August 3, 2012

Held

(Note: This syllabus

constitutes no part of

the opinion of the court

but has been prepared

by the Reporter of

Decisions for the

convenience of the

reader.)

Plaintiff failed to present a factual basis to prevent the entry of summary

judgment for defendants in his action seeking rescission of his purchase

of a life insurance policy and alleging violations of the Consumer Fraud

Act, and he was properly denied leave to file an amended complaint for

fraud.

Decision Under 

Review

Appeal from the Circuit Court of Cook County, No. 07-CH-37687; the

Hon. Kathleen M. Pantle, Judge, presiding.

Judgment Affirmed.
Counsel on

Appeal

Robert J. Slobig and James K. Genden, both of Torshen, Slobig, Genden,

Dragutinovich & Axel, Ltd., of Chicago, for appellant.

Kevin M. O’Hagan, Daniel J. Nolan, and Edward C. Eberspacher IV, all

of O’Hagan Spencer LLC, of Chicago, for appellees.

Panel PRESIDING JUSTICE EPSTEIN delivered the judgment of the court,

with opinion.

Justices McBride and Howse concurred in the judgment, and opinion.

OPINION

¶ 1 Plaintiff, Dr. Howard Freedberg, purchased a life insurance policy from defendants, the

Ohio National Insurance Company (Ohio National) and Dennis W. McCabe, d/b/a D.W.

McCabe and Associates (McCabe), in December 2004. Plaintiff filed the instant case on

December 20, 2007, alleging that McCabe’s misrepresentations induced him to purchase the

policy. Plaintiff now appeals from: (1) the circuit court’s November 24, 2010, order granting

summary judgment in favor of defendants on both counts of plaintiff’s verified complaint

(for rescission and violations of the Consumer Fraud and Deceptive Business Practices Act

(815 ILCS 505/1 et seq. (West 2006))); and (2) the circuit court’s February 17, 2011 order

denying plaintiff’s motion to file a verified amended complaint (forfraud). Forthe following

reasons, we affirm.

¶ 2 BACKGROUND

¶ 3 In the fall of 2004, plaintiff sought financial advice from his sister, Lori Komisar, who

has a business degree from the University of Illinois and had worked as a trader for a large

New York firm. Plaintiff was under a court order, entered in his divorce case, to maintain a

certain level of insurance for his five children. He relied on his sister because he had “zero

financial background.”

¶ 4 Komisar referred plaintiff to McCabe, an agent of Ohio National. Plaintiff first spoke to

McCabe in the fall of 2004. Plaintiff and McCabe also met several times and discussed

plaintiff’s goals. McCabe sold plaintiff the life insurance required by the divorce settlement

and order. In addition to protecting his children, plaintiff also wanted to protect his assets

from potential creditors and to pay off the mortgage on his residence. Plaintiff requested that

McCabe review plaintiff’s other life insurance policies that he owned at the time (with First

Colony and Sun Life). Plaintiff did not inform McCabe that, at the time, plaintiff had a

pending lawsuit against him by a former business partner. McCabe suggested a whole life

policy and showed plaintiff other options.

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¶ 5 On October 11, 2004, McCabe sent plaintiff the term life insurance policy he had

purchased to satisfy the divorce settlement agreement and order, as well as an application for

a new policy based on his initial review of plaintiff’s policies with the other companies.

Thereafter, Komisar advised McCabe that his banker had recommended plaintiff purchase

a $1 million annuity.

¶ 6 On November 11, 2004, McCabe sent a letter to Komisar showing her two options for

plaintiff with summaries of each. Option I was life insurance with a discounted premium.

Option IIwas a single premium deferred annuity. In his letter, McCabe explained that in both

cases they were “not subject to creditors.”

¶ 7 On December 1, 2004, plaintiff met with McCabe in person for the first time. McCabe’s

affidavit states that the meeting occurred at Fingerweights Corporation in Wheeling and that

Komisar was also present. During his deposition, plaintiff testified that he had no

independent recollection of how many meetings he had with McCabe in 2004 and believed

there were three or four meetings. Plaintiff could not recall the specifics of any of the

meetings. He could recall that McCabe told him he could take money out of the policy to pay

off his house and that there would be no problems, penalties or repercussions. Plaintiff

signed an application for the whole life insurance policy that he eventually purchased (the

Policy). Plaintiff did not choose either of the two options that had been presented but,

instead, chose a whole life policy that had the same $4.5 million death benefit but had a

lower premium than the $256,000 annual premium illustrated with Option I. Plaintiff’s

monthly payments were $18,000 for an annual premium of $216,000.

¶ 8 In a letter dated December 2, 2004, McCabe documented plaintiff’s decision and also

advised plaintiff that, based on the $18,000 monthly premium, the cash value at age 65

would be over $1.2 million (plaintiff was 49 at the time). According to the affidavit of Ray

Spears, the second vice president of underwriting at Ohio National, he received plaintiff’s

application on December 2, 2004.

¶ 9 In December 2004, plaintiff discussed his purchase of the policy with his financial

advisor, Jarvis Friduss, a certified public accountant. Friduss was not familiar with Ohio

National and referred plaintiff to Steve Braun, an agent for Northwestern Mutual Life

Insurance Company. On December 8, 2004, Braun faxed plaintiff: (1) information on how

cash value is exempt from creditors in Illinois; (2) a company comparison of Northwestern

Mutual and Ohio National; and (3) an illustration showing premiums of $18,000 per month

for 4 years. Braun also told plaintiff that he “would be curious to see an illustration from

Ohio National.” Plaintiff ultimately did not purchase a policy from Northwestern Mutual.

¶ 10 Meanwhile, Ohio National processed plaintiff’s application. As part of the process, Ohio

National created a policy delivery receipt on or about December 8, 2004. On December 8,

2004, Ohio National sent, via Federal Express, the original policy and a policy

acknowledgment receipt to Dennis McCabe. According to Spears’s affidavit, McCabe

received the original policy and the policy acknowledgment receipt on December 9, 2004.

The Policy was issued by Ohio National with a face amount of $4,500,000.

¶ 11 In his deposition, McCabe testified that he met with plaintiff, plaintiff’s estate-planning

attorney John Worthen, and Komisar on February 10, 2005, in plaintiff’s office. He testified

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that he reviewed the Policy with plaintiff and Komisar before John Worthen arrived. He also

testified that he provided the Policy to plaintiff along with the delivery receipt. Plaintiff

signed the delivery receipt and the body of the document refers to the Policy. The delivery

receipt is dated February 10, 2005.

¶ 12 In late 2005, the lawsuit filed against plaintiff by his former business partner went to trial.

On January 27, 2006, judgment was entered against plaintiff in the amount of $422,400. In

January 2006, plaintiff had a meeting with Friduss and the two discussed the Policy. Plaintiff

testified in his deposition that he “probably went home and tried to find the policy for

[Friduss] and could not find the policy.” Plaintiff also testified that Friduss “probably had

asked [him] at that point to obtain a copy of the policy.” Plaintiff conceded that he did not

“recall if he explicitly had asked [him] and that he did not have “100 percent independent

recollection to those facts.” In his deposition, Friduss acknowledged that he spoke to

McCabe in January 2006, but had “no independent memory” of the conversation.

¶ 13 On February 22, 2006, plaintiff, Friduss, McCabe, and Worthen met in Friduss’s office.

During the meeting, McCabe first learned of the lawsuit and the judgment against plaintiff.

McCabe testified in his deposition that it was his understanding that the purpose of the

meeting was to review plaintiff’s estate plan and that there were questions regarding whether

plaintiff could afford his insurance premiums. McCabe also stated that therewas a discussion

regarding taking the cash value out of the Policy and the interest rate. McCabe stated that

plaintiff was upset and stated it was the first time he had heard of loan interest on the Policy.

¶ 14 Friduss testified in his deposition that he had no independent recollection of ever seeing

the Policy, but if he did it would probably have been in February 2006 at the meeting with

McCabe. In his deposition, plaintiff was asked if he “reviewed the policy with [Friduss]

sometime in March 2006,” and plaintiff responded, “[a]t some point I did, yes.” In his

verified complaint, plaintiff states “[i]n about March 2006, [plaintiff] finally obtained a copy

of the [Policy.]” According to plaintiff’s verified complaint, after he reviewed the Policy,

“[i]t became apparent to [plaintiff and Friduss], that the [P]olicy did not have any provision

that would permit [plaintiff] to withdraw cash value from the [P]olicy without penalties or

charges, and [that plaintiff] had not been given any discount from the regular premium for

such policies.”

¶ 15 During his deposition, Friduss also discussed email communications between McCabe

and himself in March and April 2006 regarding the purported 20% discount plaintiff had

received when he obtained the Policy. Specifically, Friduss asked McCabe if that discount

would be lost if the premium payments were reduced. Friduss noted that at no time did

McCabe say that the 20% discount did not exist and that, instead, McCabe responded that

he would call Ohio National to see how the request to reduce premiums while maintaining

the discount would be accomplished.

¶ 16 On October 25, 2006, plaintiff, through his attorneys, sent a written demand to Ohio

National for rescission of the Policy and demanded return of all premiums. At the same time

that plaintiff sent the demand for rescission to Ohio National, he was in the process of taking

steps to replace the Policy with a similar policy from Northwestern Mutual. By letter dated

November 30, 2006, Ohio National refused to rescind the policy or return the premiums. Its

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decision was based, in part, on plaintiff’s application for a replacement policy. Ohio National

noted that the premium for this replacement policywas nearthe minimum premium required

to support a $4.5 million death benefit and that the replacement policy provided little or no

ability to generate cash value, which was a stated goal of plaintiff’s when he applied for the

Policy on December 1, 2004. Ohio National also stated that it hoped to retain plaintiff as a

valued customer.

¶ 17 The parties apparently tried to resolve the situation. During this time, Ohio National

continued to automaticallywithdrawthe $18,000 premium from plaintiff’s checking account.

According to an affidavit of Robert J. Slobig, one of plaintiff’s attorneys, he sent a letter to

Ohio National on September 12, 2007, advising it that plaintiff had taken steps to stop the

automatic payment because it was inconsistent with his desire to obtain rescission. Ohio

National then began collecting the $18,000 monthly premium by means of an “Automatic

Premium Loan” as allowed per the Policy.

¶ 18 According to Slobig’s affidavit, by letter dated November 21, 2007, Ohio National

rejected plaintiff’s demand for rescission and a refund of his premiums. On December 20,

2007, plaintiff filed a two-count verified complaint for rescission and violations of the

Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/2 et seq. (West

2006)).

¶ 19 On or about February 1, 2008, plaintiff filed a motion for temporary reliefto preserve the

status quo, requesting a temporary order restraining and enjoining Ohio National from

charging premiums, interest, loans or other amounts against the Policy, but allowing him to

maintain the Policy’s benefits. On February 4, 2008, the circuit court denied plaintiff’s

motion. Plaintiff surrendered the policy on February 19, 2008. Plaintiff also applied for, and

obtained, two term life insurance policies.

¶ 20 On June 16, 2010, defendants filed a motion for summary judgment. On November 12,

2010, before the trial court ruled on defendants’ motion for summaryjudgment, plaintiff filed

a motion for leave to file a verified amended complaint. The proposed amended complaint

added claims for common law fraud, negligence, and negligent misrepresentation.

¶ 21 On November 24, 2010, the circuit court granted summary judgment in favor of

defendants on both counts of plaintiff’s verified complaint. On February 17, 2011, the circuit

court denied plaintiff’s motion to file a verified amended complaint. Plaintiff now appeals

both orders.

¶ 22 ANALYSIS

¶ 23 Motion for Summary Judgment

¶ 24 Plaintiff first argues that the trial court erred in granting summary judgment. He contends

that there were disputed issues of fact as to both counts of his verified complaint (for

rescission and violations of the Consumer Fraud and Deceptive Business Practices Act).

¶ 25 We review the trial court’s decision to grant summary judgment de novo. Outboard

Marine Corp. v. Liberty Mutual Insurance Co., 154 Ill. 2d 90, 102 (1992). “ ‘Summary

judgment is a drastic measure and should only be granted if the movant’s right to judgment

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is clear and free from doubt.’ ” Village of Palatine v. Palatine Associates, LLC, 2012 IL App

(1st) 102707, ¶ 42 (quoting Outboard Marine Corp., 154 Ill. 2d at 102). Nonetheless, mere

speculation or conjecture is insufficient to avoid summary judgment. Id.; see also Miller v.

Hecox, 2012 IL App (2d) 110546, ¶ 42. A defendant moving for summary judgment may

meet its initial burden of proof by affirmatively showing that some element of the case must

be resolved in his favor or by establishing that there is an absence of evidence to support the

nonmoving party’s case. Village of Palatine, 2012 IL App (1st) 102707, ¶ 42.

¶ 26 “The purpose of summary judgment is not to try an issue of fact but *** to determine

whether a triable issue of fact exists. [Citation.] To withstand a summary judgment motion,

the nonmoving party need not prove his case at this preliminary stage but must present some

factual basis that would support his claim. [Citation.] We may affirm on any basis appearing

in the record, whether or not the trial court relied on that basis or its reasoning was correct.”

(Internal quotation marks omitted.) Id. ¶ 43.

¶ 27 “Rescission is the cancelling of a contract so as to restore the parties to their initial status.

[Citation.]” (Internal quotation marks omitted.) Illinois State Bar Ass’n Mutual Insurance

Co. v. Coregis Insurance Co., 355 Ill. App. 3d 156, 165 (2004). “One seeking to rescind a

transaction on the ground of fraud or misrepresentation must elect to do so promptly after

learning of the fraud or misrepresentation, must announce his purpose and must adhere to

it.” Mollihan v. Stephany, 35 Ill. App. 3d 101, 103 (1975). “An unreasonable delay in taking

the necessary steps to set aside a fraudulent contract will have the effect of affirming it.”

Illinois State Bar Ass’n Mutual Insurance Co., 355 Ill. App. 3d at 165.

¶ 28 In the instant case, the trial court concluded that plaintiff’s unreasonable delayon seeking

rescission resulted in ratification of the Policy. We agree.

¶ 29 Although not controlling, we find instructive the case of McNaught v. Equitable Life

Assurance Society of the United States, 121 N.Y.S. 447 (N.Y. App. Div. 1910), cited by

defendants and the trial court. McNaught also involved plaintiffs seeking to rescind a life

insurance policy and alleging he was fraudulently induced into purchasing it. After bringing

suit, the plaintiffs continued to pay premiums and receive the policy’s benefits and coverage.

The McNaught court acknowledged that one who discovers he has been induced to enterinto

a contract by fraud may rescind the contract. McNaught, 121 N.Y.S. at 449. The court further

noted, however, that rescission would not be available “if, after knowledge of the fraud, he

affirms the contract by accepting a benefit under it.” (Emphasis added.) Id. In denying the

plaintiffs’ claim for rescission and concluding that the plaintiffs had ratified the policy, the

McNaught court noted that the plaintiffs conceded that “if the insured should die during the

pendency of this action, and while the current premiums were being paid, the defendant

would continue [to be] liable to the beneficiary of the policy for the full amount of insurance,

notwithstanding the plaintiffs’ election to rescind.” Id. at 451. The court further noted that

“[i]n the same breath,” the plaintiffs acknowledged that if a judgment for rescission was

obtained before the death of the insured, they would be entitled to recover all of the

premiums paid both before and after bringing suit. Id. As the court explained:

“If this can be so, then a novel situation, indeed, exists, and one which is unsupported

either by precedent or reason. The equitable action for a rescission cannot be considered

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as a speculation. And if it could be, it should not be assimilated to the tossing of a coin

on the principle of: ‘Heads, I win; tails, you lose.’ ” Id.

The trial court here concluded that plaintiff displayed the same type of “heads I win, tails you

lose” attitude which is inconsistent with a sincere desire to rescind the Policy.

¶ 30 Plaintiff did not promptly demand rescission nor did he adhere to his purpose. Regarding

plaintiff’s delay in seeking rescission, plaintiff claims he did not receive a copy of the policy

in February 2005. He asserts that “[on] some date, which [plaintiff] does not know, McCabe

induced him to sign a delivery receipt for the Ohio National policy. The handwritten date on

the form is not [plaintiff’s] handwriting, although the signature is.” Although plaintiff claims

he did not receive the Policy in February 2005, which was the date listed next to his signature

on the delivery receipt, he presented no evidence as to when he did sign the delivery receipt.

In any event, in his verified complaint, plaintiff alleged that he had discussions about the

policywith his accountant in January 2006. His accountant asked him various questions and,

since plaintiff did not have a copy of the Policy, he requested a copy from McCabe. Plaintiff

states that “[i]n about March 2006, [plaintiff] finally obtained a copy of the [Policy].” He

also states that he became aware of the alleged misrepresentations “upon review of the actual

[Policy] in 2006.” When asked in his deposition whether he reviewed the policy with his

accountant in March 2006, plaintiff responded, “At some point, I did.” He now contends that

this statement does not unequivocally mean that he reviewed the policy in March 2006, but

presents no facts as to when he did review the policy or learn of the alleged fraud. Plaintiff

also now claims that he did not receive a copy of the Policy until after September 2006, when

he received a duplicate copy from Ohio National. This was the only duplicate copy sent by

Ohio National. Thus, Ohio National notes that “the only policy that plaintiff could have

possessed at any time prior to September 6, 2006 was the original policy” that it sent to

McCabe in December 2004. Nonetheless, plaintiff asserts that his written demand for

rescission, on October 25, 2006, was prompt.

¶ 31 The trial court noted correctly that plaintiff made judicial admissions which cannot be

contradicted. As the Illinois Supreme Court has explained:

“Judicial admissions are defined as deliberate, clear, unequivocal statements by a

party about a concrete fact within that party’s knowledge. [Citation.] Where made, a

judicial admission may not be contradicted in a motion for summary judgment [citation]

or at trial [citation]. The purpose of the rule is to remove the temptation to commit

perjury. [Citation.]” In re Estate of Rennick, 181 Ill. 2d 395, 406-07 (1998).

“A factual admission in a verified pleading constitutes a judicial admission, which has the

effect of withdrawing a fact from issue and makes it unnecessary for the opposing party to

introduce evidence in support thereof. [Citation.]” L.D.S., LLCv. Southern Cross Food, Ltd.,

2011 IL App (1st) 102379, ¶ 35. “A sworn statement of fact in a verified pleading remains

binding on the party even after an amendment, and the party cannot subsequently contradict

the factual allegation.” Id. Moreover, even pleadings that are not verified may be used as

evidentiary admissions. National Surety Corp. v. Swissler Plumbing, Inc., 167 Ill. App. 3d

608, 616 (1988).

¶ 32 The trial court acknowledged that plaintiff contended that the reason for the delay in

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filing suit was that he was attempting to settle the matter with Ohio National. However, as

the trial court noted, these settlement negotiations did not commence until May 11, 2007,

when plaintiff’s attorney contacted Ohio National and threatened to file suit, which was 14

months after March 2006, the date plaintiff learned of the alleged fraud, and 6 months after

Ohio National denied his demand for rescission. Ohio National denied his demand for

rescission on November 30, 2006, yet plaintiff did not file this action seeking rescission until

December 20, 2007.

¶ 33 Thus, there was a delay of seven months between the time plaintiff admitted he received

a copy of the Policy and his initial demand for rescission. Plaintiff then delayed 14 months

before filing his court action for rescission. He continued to make premium payments of

$18,000 per month until September 2007 when he cancelled the automatic payment

instruction which allowed Ohio National to withdraw the premiums from his checking

account. These delays and premium payments, while receiving the benefits of the Policy,

constitute a ratification of the Policy.

¶ 34 Moreover, plaintiff did not adhere to his purpose. Even after he filed this action, plaintiff

filed the petition for a temporary restraining order in February 2008 seeking an order that

would allow him to maintain the policy benefits without having to pay the premiums

throughout the course of the litigation. The trial court concluded that plaintiff’s “heads I win,

tails you lose” attitude continued from the time he first learned of the alleged fraud in March

2006, throughout the negotiations with Ohio National, until the court denied his petition for

a temporary restraining order in 2008.

¶ 35 Although plaintiff’s ratification of the policy renders moot his claims of fraud, we note

that the record is replete with responses from plaintiff as to his “beliefs” and his lack of

recollection as to numerous statements, transactions, or events. Also, as the trial court noted,

plaintiff’s allegation of fraud regarding delivery of the Policy was pure conjecture. When

asked in a supplementary interrogatory to identify documents which he signed in the course

of his dealings with McCabe and to explain the circumstances surrounding the signing of the

documents, plaintiff answered that he “believes he signed his name to a receipt for the

delivery of the subject Ohio National insurance policy, No. 1544255, without having

received the policy, and without being advised what he was signing, at a meeting with

Dennis McCabe.” (Emphasis added.) Moreover, although the claims of fraud are moot, we

note that, with the exception of plaintiff’s claims that he did not receive the discount on his

premium that he was told he would receive, the remaining allegations of fraud (i.e., that he

could withdraw funds from the Policy’s cash value without paying “interest” and that

McCabe told plaintiff the Policy would accumulate at least $1 million in cash value within

five years) were based on surmise and conjecture and plaintiff failed to present any evidence

sufficient to withstand summary judgment.

¶ 36 To prevail on a claim of fraudulent misrepresentation, a plaintiff must establish the

following elements: (1) a false statement of material fact; (2) known or believed to be false

by the person making it; (3) an intent to induce the plaintiff to act; (4) action by the plaintiff

in justifiable reliance on the truth of the statement; and (5) damage to the plaintiff resulting

from such reliance. Doe v. Dilling, 228 Ill. 2d 324, 342-43 (2008). “The elements of a claim

under the Consumer Fraud Act are: ‘(1) a deceptive act or practice by the defendant; (2) the

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defendant’s intent that the plaintiff rely on the deception; and (3) the occurrence of the

deception during a course of conduct involving trade or commerce.’ [Citation.]” Sheffler v.

Commonwealth Edison Co., 2011 IL 110166, ¶ 62.

¶ 37 As the trial court noted, when plaintiff was asked at his deposition about the alleged

misrepresentations made by McCabe, plaintiff testified as follows:

“[DEFENDANTS’ ATTORNEY]: If you would turn to paragraph nine of your

complaint. The second sentence says, ‘Mr. McCabe further represented to Dr. Freedberg

that Dr. Freedberg would then be able to withdraw this cash value enough to pay off Dr.

Freedberg’s home mortgage from the proposed Ohio National policy without penalty,

interest, or other charges, and use it to pay off the mortgage.’

Is it fair to say that that is not word for word what Mr. McCabe said to you?

[PLAINTIFF]: I don’t recall exactly word for word, but I think it does–it’s accurate

in regards to what was told to me. There was [sic] no penalties. And I was able to take

it out. I was not borrowing it out. I could take it out.

[DEFENDANTS’ ATTORNEY]: As close to word for word, what did Dennis

McCabe tell you relating to taking money out of the policy?

[PLAINTIFF]: Over four years later, I can’t give you word for word. I can tell you

that I can take the money out. I recall those words. Was [sic] there any problems? No.

Was [sic] there any penalties? No.

[DEFENDANTS’ ATTORNEY]: Did Mr. McCabe tell you that you could take

money out that you didn’t have to pay back?

[PLAINTIFF]: I don’t–I recall that there was [sic] no repercussions for doing that.

That’s why I did this policy.

[DEFENDANTS’ ATTORNEY]: What did Mr. McCabe specifically state that leads

you to believe that he said there were no repercussions?

[PLAINTIFF]: I asked him several times.

[DEFENDANTS’ ATTORNEY]: What did you ask him?

[PLAINTIFF]: Isaid, I can just take the money out and pay off my house and nothing

else needs to be done? No. There’s [sic] no repercussions? No. There is [sic] no

penalties. No.

[DEFENDANTS’ ATTORNEY]: Mr. McCabe said, There is [sic] no repercussions?

[PLAINTIFF]: Well, I can’t remember the exact verbiage. I’m telling you what I

remember as the–not the exact words, but what was said, the context of it.

[DEFENDANTS’ ATTORNEY]: Did you ask Mr. McCabe if the money you took

out would be a loan?

[PLAINTIFF]: I didn’t ask if it was a loan. I just asked if I could take it out and there

is [sic] no problems. No problems.

[DEFENDANTS’ ATTORNEY]: Did Mr. McCabe tell you that after five years you

could withdraw $1 million tax free?

[PLAINTIFF]: Yes. Well, I’m–I don’t remember, you know, the words tax free. But

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it was my money paid in. So I could take it out. I don’t remember anything being told if

there were any tax consequences of it either.”

¶ 38 Contraryto plaintiff’s assertions, the trial court did not “weigh” the witnesses’ credibility

but instead determined that plaintiff “has not produced any evidence to support his allegation

that McCabe misrepresented any material facts to Freedberg, or that Freedberg reasonably

relied on any misrepresentation, material or otherwise, or that McCabe intended Freedberg

to rely on any misrepresentation that he made.” As noted earlier, at the summary judgment

stage, a plaintiff must present some factual basis that would support his claim. Village of

Palatine v. Palatine Associates, LLC, 2012 IL App (1st) 102707, ¶ 43. We conclude that the

trial court correctly granted summary judgment to defendants.

¶ 39 Motion to Amend

¶ 40 Plaintiff next argues that the trial court should have granted him leave to file a verified

amended complaint. We review the trial court’s decision to deny leave to file an amended

complaint under an abuse of discretion standard. Cimco Communications, Inc. v. National

Fire Insurance Co. of Hartford, 407 Ill. App. 3d 32, 38 (2011).

¶ 41 Plaintiff correctlynotes that amendments maybe allowed “on just and reasonable terms.”

Notwithstanding the general rule that amendments should be granted liberally, a party’s right

to amend is not absolute and unlimited. Goldberg v. Brooks, 409 Ill. App. 3d 106, 113

(2011). As this court has explained:

“The decision whether to allow a party to amend its pleadings is within the sound

discretion of the trial court; such a decision will not be disturbed without a showing of

an abuse of that discretion. [Citation.] The right to amend pleadings is not absolute, and

the timeliness of such a request may be considered by the court in its discretion.

[Citation.] The court should exercise its power to permit amendment with a view toward

allowing a party to present fully his causes of action. [Citation.] Ordinarily, amendment

should not be allowed where the matters asserted were known by the moving party at the

time the original pleading was drafted and for which no excuse is offered in explanation

of the initial failure. [Citation.] The test to be applied in determining whether the trial

court’s discretion was properly exercised is whether allowance of the amendment

furthers the ends of justice. [Citation.]” Trans World Airlines, Inc. v. Martin Automatic,

Inc., 215 Ill. App. 3d 622, 627-28 (1991).

¶ 42 Section 2-616(a) of the Code of Civil Procedure states:

“Amendments. (a) At any time before final judgment amendments may be allowed on

just and reasonable terms, introducing any party who ought to have been joined as

plaintiff or defendant, dismissing any party, changing the cause of action or defense or

adding new causes of action or defenses, and in any matter, either of form or substance,

in anyprocess, pleading, bill of particulars or proceedings, which mayenable the plaintiff

to sustain the claim for which it was intended to be brought or the defendant to make a

defense or assert a cross claim.” 735 ILCS 5/2-616(a) (West 2008).

Plaintiff now asserts that the trial court abused its discretion in not allowing him to add

additional counts based on the same facts.

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¶ 43 Since the issue of whether a trial court may deny a plaintiff leave to amend his pleadings

is one which is properly addressed to the sound discretion of the trial court, “a reviewing

court may intervene only where the trial court acted arbitrarily or, in light of all the

circumstances presented, exceeded the bounds of reason and ignored recognized principles

of law so that substantial injustice resulted [citation]; or where the judgment of the trial court

is found to be palpably erroneous, contrary to the manifest weight of the evidence or

manifestly unjust [citation]; or where no reasonable person could take the view adopted by

the trial court.” Nicholson v. Chicago Bar Ass’n, 233 Ill. App. 3d 1040, 1044-45 (1992). In

denying plaintiff leave to amend his complaint, the trial court noted that the motion was very

brief and did not provide the court with affirmative reasons for allowing the amendment. As

the trial court also stated, it had “the discretion to dictate and enforce what it believe[d] to

be just and reasonable terms.” CitingNicholson, the trial court noted that the phrase “just and

reasonable terms” implies the existence of a “time limitation within which the amendment

must be filed.”

¶ 44 The trial court’s decision denying plaintiff leave to amend his complaint must be viewed

in the context of the present case. Plaintiff argues that the trial court’s decision was, to a great

extent, premised on the fact that it had granted defendants’ motion for summary judgment.

While that may be true, as defendants note, a motion to amend that is nothing more than an

attempt to evade an unfavorable summary judgment outcome should not be granted. See,

e.g., Kleinhans v. Lisle Savings Profit Sharing Trust, 810 F.2d 618, 625-26 (7th Cir. 1987)

(district court did not abuse its discretion in denying leave to amend where proposed

amendment came after the close of discovery and defendants moved for summary judgment,

because plaintiff’s motion “represents an apparent attempt to avoid the effect of summary

judgment” (internal quotation marks omitted)); cf. United Air Lines, Inc. v. Conductron

Corp., 69 Ill. App. 3d 847, 858 (1979) (trial court did not abuse its discretion in denying

defendants leave to amend their answer to plead statute of limitations where motion was

made after plaintiff’s motion for summary judgment was presented and heard, and trial court

stated that summary judgment would be entered for plaintiff and defendants gave no reason

for the failure to plead the affirmative defense at an earlier time).

¶ 45 In determining whether to allow an amendment to the pleadings, the trial court considers

the following factors: (1) whether the proposed amendment would cure a defect in the

pleadings; (2) whether the proposed amendment would prejudice or surprise other parties;

(3) whether the proposed amendment is timely; and (4) whether there were previous

opportunities to amend the pleading. See, e.g., Krum v. Chicago National League Ball Club,

Inc., 365 Ill. App. 3d 785, 790 (2006). The trial court here considered each factor and

determined that none of them weighed in favor of plaintiff.

¶ 46 As to the first factor, citing Tri-G, Inc. v. Burke, Bosselman, & Weaver, 353 Ill. App. 3d

197, 215 (2004), plaintiff now argues that this factor was irrelevant because he was adding

new causes of action. As defendants note, the Illinois Supreme Court reversed Tri-G without

reviewing its “one-line ‘failure to cure’ ” analysis. Tri-G, Inc. v. Burke, Bosselman &

Weaver, 222 Ill. 2d 218 (2006). Even assuming this factor was irrelevant, the trial court

found the other three factors also weighed against plaintiff.

¶ 47 As to the second factor, plaintiff argues that the trial court stated only that there was a

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“possibility” of prejudice and failed to explain why this was so. Plaintiff provides no support

for his assertion that the trial court was required to explain the prejudice that would result.

We also find defendants’ citations to cases where a motion to amend was proposed “on the

eve of trial” or “after trial has begun” inapposite. Nonetheless, in considering the possible

prejudice to defendants, the trial court noted that the new claims carried substantially

different elements and theories of law.

¶ 48 Regarding the third factor, the trial court found that plaintiff’s motion to amend was not

timely. We note that plaintiff has contended on appeal that the timeliness factor has no

relevance because summary judgment was erroneously granted. On this point, plaintiff is

clearly wrong. In any event, we have now affirmed the trial court’s decision granting

summary judgment.

¶ 49 Plaintiff has failed to adequately address the timeliness factor, other than to refer to it as

a factor that courts “sometimes” consider and imply that it is an irrelevant factor where the

trial court failed to “explain” how adding these new theories would have been prejudicial.

¶ 50 Plaintiff filed his original complaint on December 20, 2007; he filed his motion to amend

on November 12, 2010 (which was the eve of the trial court’s scheduled ruling on

defendants’ motion for summary judgment). As the trial court noted, plaintiff had over 21⁄2

years from the time he filed his original complaint before the motion for summary judgment

was heard. As defendants note, it was nearly three years later. The court also noted that

plaintiff did not allege that he discovered new information during this period of time which

required him to seek leave to amend his original complaint. Instead, plaintiff’s decision was

based on a desire to “introduce additional theories of relief” in order to increase his chances

of recovery by creating “various available routes to the same goal.” The trial court was not

persuaded that this was a valid reason.

¶ 51 Additionally, however, the trial court explained that plaintiff’s motion was untimely

because, although summary judgment had not yet been entered at the time plaintiff sought

leave to file an amended complaint, the motion for summary judgment had been filed,

argument had been heard, and the court’s ruling was scheduled. Although plaintiff’s motion

to amend his complaint was technically filed before the entry of summary judgment, plaintiff

did not provide any explanation for filing the motion at such a late stage in the proceedings.

The trial court considered that plaintiff was aware of the possibility that summary judgment

could be entered, thus ending the case, while the motion to amend was pending. Relying on

Martin v. Yellow Cab Co., 208 Ill. App. 3d 572, 577 (1990), the trial court noted that this

court has held that leave to amend a complaint is properly denied in circumstances where a

plaintiff had ample time to discover any independent causes of action, where the proposed

additional counts are based on facts available to the plaintiff when the original complaint was

filed, and the motion to amend was filed 20 months after the complaint was filed, and more

than 3 years after the accident in question, and defendant’s motion for summary judgment

was pending. The trial court ultimatelydecided that plaintiff’s motion to amend was untimely

because he waited nearly three years to file it, had no explanation for the time delay, and

there was a ruling pending on the motion for summary judgment.

¶ 52 As to the fourth factor, it was undisputed that plaintiff had previous opportunities to

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amend. As the trial court noted, he waited nearly three years to file his motion for leave to

file his verified amended complaint, he admitted that the facts had not changed, and he

admitted that the reason for the amendment was “to create multiple avenues” by which the

trial court might reach an outcome in his favor. Plaintiff’s argument that the trial court

abused its discretion in denying him leave to amend his complaint fails.

¶ 53 We note that there are additional reasons why the trial court correctly denied the motion

to amend with respect to the proposed counts for common law fraud and negligent

misrepresentation. In opposing plaintiff’s motion for leave to file an amended complaint,

defendants argued that “collateral estoppel bars plaintiff from relitigating the alreadydecided

issues.” The trial court acknowledged this argument but based its decision on the factors

listed above. Nonetheless, we find defendants’ argument well taken.

¶ 54 The doctrine of collateral estoppel applies when (1) an issue decided in the prior

adjudication is identical with the one presented in the current suit; (2) the prior suit was

terminated with a final judgment on the merits; and (3) the party against whom the estoppel

is asserted was a party or in privity with a party in the prior suit. Du Page Forklift Service,

Inc. v. Material Handling Services, Inc., 195 Ill. 2d 71, 77 (2001). Here, a judgment on the

merits was entered by the court on November 24, 2010. See id. at 84 (“Summary judgment

is the procedural equivalent of a trial and is an adjudication on the merits.”). With respect to

the proposed counts for common law fraud and negligent misrepresentation, the trial court

already addressed the issue of misrepresentation raised by those claims. As the trial court

concluded:

“Freedberg has not produced any evidence to support his allegation that McCabe

misrepresented any material facts to Freedberg, or that Freedberg reasonably relied on

anymisrepresentation, material or otherwise, or that McCabe intended Freedberg to rely

on any misrepresentation he made.”

¶ 55 The trial court did not abuse its discretion in denying plaintiff leave to amend his

complaint to add new causes of action for common law fraud, negligent misrepresentation,

and negligence. We affirm the trial court’s decision denying plaintiff leave to file an

amended complaint.

¶ 56 CONCLUSION

¶ 57 In accordance with the foregoing, we: (1) affirm the decision of the circuit court of Cook

County granting summary judgment to defendants on counts I and II of plaintiff’s verified

complaint; and (2) affirm the court’s decision denying plaintiff’s motion for leave to file an

amended verified complaint adding counts for common law fraud, negligent

misrepresentation, and negligence.

¶ 58 Affirmed.

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